IMPORT PERMITS.

Auckland Star, Volume LXX, Issue 192, 16 August 1939, Page 4

IMPORT PERMITS.

RESERVE BANK BASIS. I CONSTERNATION IN CITY. '• BOMBSHELL FOR MERCHANTS. a Consternation has Ibeen caused in s importing circles in Auckland Iby the il basis adopted by the Reserve Bank in e allocating funds for remittance overh seas during the next few months in 4 payment for licensed imports. The knowledge that only one-fiftli to onethird of the amount applied for -win = be urranted 'between now and the end • of the year has given rise to the gravest of fears. The remaining twoh thirds to four-fifths of the funds needed will be granted 'between January and June 30 of next year. i It has been made clear in the first i permits issued that the Reserve Bank is determined to subordinate all other considerations to the building up of the overseas funds, in which the needs of 1 the Government are 'being treated as 8 paramount. 5 In some cases, where importing firms have recently paid drafts amounting to s considerable sums to obtain deliverv of 5 goods coming to hand, the funds aHo- " cated for the remainder of this Tear f will be reduced to such an extent," by 5 the deduction of these amounts, that i there will Ibe no further funds avadlaible r for remittance until Novemiber or even • later. How Trade Has Been Cut. Explaining the position, a member of an importing company said the permit granted his firm provided that one-fifth of the funds required would <be available before the end of December, and the balance in the succeeding six months. It had not (been necessary to ajpply to the Reserve Bank where amounts of less than £100 were involved under Customs Department permits, (but in hig case 80 per cent of the total goods licensed were subject to the (bank's restriction. He pointed out that when the licenses were tyranted the heavy restrictions imposed under the import schedule for the second period were in force, and this represented a curtailment far (below normal requirements. The most generous amounts were those provided for raw materials for local manufacturing purposes, some of these being in excess of normal. As the import permits had been recently extended for six months, up to the end of June, 1940, it appeared, ho said, that the Government intended to reduce the import trade far below what was contemplated a few months ago, a course which would have serious effects . on employment, business turnover, . transport activity, Government revenue i and secondary industry. Immediate staff • reductions were inevitable, and It appeared that forward or indent selling would be virtually eliminated. Merchants would (be compelled to utilise their small allocations of sterling funds i for stocks and confine their activities ; to selling from stocks. Depleted Stocks. "Where merchants have (been called on to •meet heavy demands from stocks, such as for manufacturing, their stock position over the next few months will be desiperate," said one authority interviewed. "The only importers who might be aible to view the position philosophically are the minority who are fortunate in having reasonable stocks." It was generally expected in business circles that a statement would be made by the Reserve Bank this week explaining the policy which it was intended to pursue. At the present time, it was stated, traders were working in the dark and there was urgent need for clarifying the position. The view taken in wellinformed quarters was that the most difficult time would be between now and Christmas, after which, if the next export season proved to be reasonably favourable, funds should be available in | larger quantity.